Thyrocare Technologies reported a strong Q2 FY27 with a 25% revenue jump to Rs 271 crore. The company is divesting its radiology unit, Nueclear Healthcare, for Rs 141 crore to focus on its high-margin core pathology business. Management maintained a 31-32% margin outlook despite heavy marketing investments for a new pregnancy test kit launch.
Thyrocare Reports Strong Q2 Growth and Strategic Radiology Divestment
Consolidated revenue rose 25% YoY to Rs 271 crore, with PAT reaching Rs 60 crore.
Radiology business divestment at Rs 141 crore marks a strategic shift toward core pathology.
Reader Takeaway: Core pathology expansion drives 25% growth, while radiology divestment shifts focus to higher-margin specialty diagnostics.
What just happened
Thyrocare Technologies has delivered a robust second quarter for FY27, reporting a consolidated revenue of Rs 271 crore, a 25% increase year-on-year. The standalone pathology business, the company’s core, grew 26.7% to Rs 256 crore, supported by a 27% increase in testing volumes. Alongside these results, the board approved the divestment of its radiology subsidiary, Nueclear Healthcare Limited (NHL), to Trovera in a deal valued at Rs 141 crore.
Why this matters
The divestment of the radiology vertical is a strategic move to clean up the balance sheet and improve capital efficiency. Management noted that NHL’s return on capital employed (ROCE) was 6.95%, significantly lower than the 34.9% ROCE generated by the core pathology business. By exiting radiology, the company intends to double down on pathology and high-growth segments like genomics and allergy testing.
Operational Highlights
The company added 1,180 franchises in Q2, reaching a record 12,911 active partners. It also expanded its lab network to 48 domestic sites and one international site in Tanzania. A key development is the entry into the B2C diagnostics market with a new pregnancy test kit. While the product is now available in 10,000+ pharmacies, management warned that marketing costs for this launch will weigh on EPS for the next three quarters.
Risks to watch
Investors should monitor the execution of the NHL divestment, which remains subject to shareholder and regulatory approvals. Additionally, while the franchise network is growing, management cautioned that the high rate of new additions in Q2 may not be sustainable as a permanent run-rate. The significant marketing spend on the new OTC pregnancy test kit is expected to pressure margins in the near term.
What to track next
The company aims for specialty diagnostics to contribute 10-15% of total revenue within the next 3 to 5 years. Management also clarified that potential mergers with the API Group are premature and will only be considered once that business reaches sustained profitability, targeted for Q4 FY27.